The GTL plant with about 1,000 barrels per day capacity is being built to expand the production capacity of the Karns City facility.

Calumet is planning to use the FT products to produce specialty petroleum products at the facility.

Oxford Catalysts Group CEO Roy Lipski said, "Due to the historically large gap between high oil prices and low gas prices in North America, we’re experiencing very strong interest from potential clients keen to take advantage of this arbitrage opportunity.

Calumet vice chairman and chief executive officer Bill Grube said the project will help the company use its exisiting specialty product assets.

"Converting natural gas into ultra-high quality feedstock through GTL will reduce our costs, increase security of supply and improve product quality," Grube said.

Calumet is responsible for majority of the funding of the project and the remaining amount will be provided by its project partners.

The company is expecting to complete the plant design by the end of 2012; begin site specific engineering and fabrication in the first half of 2013 and commence production at the facility in second half of 2014.